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The rare earth company Molycorp filed for bankrupt

Published:2015-08-03 14:48:49Click to rate：

According to the U.S. cable news network (CNN) June 10th news, there are rumors that the U.S. rare earth supplier Molycorp will apply for bankruptcy protection, the news caused a sharp decline in the company's shares, and sparked a discussion of the company's future and the United States in China's rare earth industry.
Experts and analysts said that although the application for bankruptcy does not necessarily mean that Molycorp failed, but in addition to reducing the debt, the company also faces many challenges. Analysts say the new technology to reduce the impact of rare earth mining on the environment is still to be improved, and the company also needs to compete in China's domestic illegal mining companies under the condition of low prices.
"We want Molycorp to be filed for bankruptcy," says Gambardella Michael, an analyst at JP Morgan chase. "And it's expected that the move could be a global market for rare earths, reducing Molycorp's liability."
Capital CRT analyst Starke Kevin said, Molycorp is likely to apply for bankruptcy, but this does not mean that it will be permanently closed. "Bankruptcy is a new beginning," he said." But Molycorp did not respond to rumors. Starke also said that because of the Molycorp in order to merge with the market price, and to finance the debt, the company faced by mergers and cost over $1700000000 in debt.
Curtin University of mining and energy economist Dudley Kingsnorth says Molycorp also faces other challenges. He also said: "Molycorp has underestimated the complexity of the use of new technologies, and it is not expected that the illegal mining will lead to the decline of rare earth prices." Rare earth needs to be purified, the process is very complex and expensive, and will cause damage to the environment. Molycorp has invested a lot of money to try to reduce the negative impact.
Starke said: "they are trying to transform a industry that is harmful to the environment into an environment-friendly industry."
The Molycorp and other rare earth suppliers are not expected, due to the illegal mining in southern China rampant, mining and purification of the original, resulting in the price of rare earth is currently in a historic low. Chinese government's crackdown on illegal mining of rare earth, but in the case of oversupply, ineffective crackdown.
Some Chinese experts say illegal mining is rampant because of China's rare earth production quotas. Government approval of rare earth production quotas for 105000 tons per year, while illegal mining output is 40000 tons, more than the supply of rare earth led to the decline in the price of rare earth. Molycorp spokesman Sims said the illegal mining companies to evade environmental regulations, so that they can be priced at 50% to sell rare earth, which makes the legitimate interests of enterprises, including the Foreign Company, including the damage.
Experts estimate that China's companies control 90% to 95% of the rare earth market. In 2010, to ensure the supply of domestic supply, the Chinese government cut the amount of rare earth exports. The world trade organization's requirements for China to abolish export restrictions, and subsequently, China has increased the amount of rare earth exports.
Many countries believe that China has an advantage in the competition. "I don't think there's a better understanding of the rare earth market than China," says Morgan Chase's Gambardella."
Molycorp is not the only supplier of rare earth facing difficulties, Australia's Linus company is trying to pay off the debts,

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